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BANK OF NOVA SCOTIA $56 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.0 billion; Market cap: $56.0 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.scotiabank.com) is Canada’s third-largest bank, with assets of $526.7 billion. The bank recently agreed to buy the 82% of DundeeWealth Inc. (Toronto symbol DW) that it does not already own. Dundee- Wealth manages investments and operates a brokerage. The company also owns the Dynamic family of mutual funds, and provides financialplanning and investment advice. The deal will double the size of Bank of Nova Scotia’s mutualfund business, and make it Canada’s fifth-largest mutual-fund company. Bank of Nova Scotia will pay $2.3 billion in cash and stock for the rest of DundeeWealth. If Dundee- Wealth shareholders approve, the sale should close in the first half of 2011. The new operations should add $0.12 a share to the bank’s annual earnings in the third year following the purchase....

ROYAL BANK OF CANADA $53 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.4 billion; Market cap: $74.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.rbc.com) is Canada’s largest bank, with total assets of $726.2 billion. In its 2010 fiscal year, which ended October 31, 2010, Royal earned $5.2 billion, or $3.46 a share. That’s up 35.4% from $3.9 billion, or $2.57 a share, in fiscal 2009. The fiscal 2010 earnings figure includes a $116-million loss on the sale of one of the bank’s main holdings, U.S.-based Liberty Life Insurance Co. Without unusual items, such as the loss on Liberty Life, Royal would have earned $5.3 billion, up 9.9% from $4.9 billion a year earlier....

TORONTO-DOMINION BANK $74 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 878.5 million; Market cap: $65.0 billion; Price-to-sales ratio: 2.6; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.td.com) is Canada’s second-largest bank, with total assets of $619.5 billion. TD recently agreed to buy privately held Chrysler Financial, which provides car loans and leases to buyers of Chrysler vehicles in Canada and the U.S. The purchase will make TD one of the top five car-loan providers in North America. The bank will pay $6.3 billion U.S. for Chrysler Financial when the deal closes in April 2011. This purchase will let TD profit from rising new-car demand. It will also add $100 million to TD’s annual earnings, starting in fiscal 2012....

Alcoa Inc. (New York symbol AA) is one of the world’s largest aluminum producers. The company is one of the blue chip stocks we analyze in our Wall Street Stock Forecaster newsletter. In 2010, Alcoa’s sales rose 14.0%, $21.0 billion from $18.4 billion in 2009. The company saw higher demand in most of its markets. In 2010, overall aluminum demand rebounded 13%, the biggest increase in 14 years. The company earned $262 million, or $0.25 a share, compared to a net loss of $985 million, or $1.06 a share, in 2009. The higher sales and higher aluminum prices were the main reasons for the improved earnings. The company also improved its productivity during the year....

When you need tax advice, business associates and friends can be a valuable source of ideas and referrals. However, non-professionals can be mistaken or out of date in their tax knowledge, no matter how confident they seem. This is also true of some semi-professionals—tax preparers, bookkeepers, insurance agents and so on. Court rulings or tax-department crackdowns can close tax loopholes. People sometimes get away with borderline tax maneuvers for lengthy periods, only because the tax authorities never take a close look at their affairs. But the more money you have, the more likely it is that your affairs will one day get a close look from someone at the tax department. Then too, some maneuvers work for some taxpayers but not others, mainly because of differing circumstances....

GLOBAL X SILVER MINERS ETF $25.72 (New York symbol SIL; buy or sell through brokers; www.globalxfunds.com) tracks the Solactive Global Silver Miners Index. This index includes between 20 and 40 international companies that mine, refine or explore for silver. Germany-based Structured Solutions AG developed this index. Global X Silver Miners ETF came out in April 2010 in response to a hot theme — in this case, strong investor interest in precious-metals stocks. But although it’s new, Global X Silver Miners ETF holds only well-established silver miners....

I hope you are enjoying and profiting from our free TSI Network daily updates. Our dailies aim to educate you on best practices in investing. They cover a wide range of investment topics, and explain conservative strategies you can use to build the best portfolio for you, and expand your wealth with less risk. The advice you get in our daily updates, as well as our investment newsletters and services (more on these below) is based on the experience I’ve built up in more than three decades in the investment business (starting with a part-time job in high school)....

SuperValu Inc. (New York symbol SVU) operates about 2,500 company-owned and franchised supermarkets. Major banners include Save-A-Lot, Albertsons and Jewel-Osco. Supervalu gets 76% of its revenue from its retail stores. It gets the remaining 24% by supplying food to 1,890 independent stores. The company continues to focus on its core business of food retailing, and has stopped selling other items, such as automotive goods and perfumes, in its stores. In its fiscal 2011 third quarter, which ended December 4, 2010, the Wall Street stock’s sales fell 5.9% to $8.7 billion from $9.2 billion a year earlier. Same-store sales declined 4.9%. The company closed underperforming stores, and was forced to cut its prices due to stronger competition from discount retailers, including Wal-Mart, which is selling more groceries in its stores....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on successful investing. Each Investor Toolkit update gives you a fundamental piece of investment strategy, and shows you how you can put it into practice right away. Tip of the week: “Cut risk in your aggressive portfolio with our ‘sell-half’ rule.” Our “sell-half” rule says that if a stock you own has doubled, you should sell half so you get back your initial stake. Once you’ve recovered your initial investment, you’ll be able to think more clearly about the stock....

ISHARES FTSE/XINHUA CHINA 25 INDEX FUND $44.32 (New York Exchange symbol FXI; buy or sell through brokers) is an ETF that aims to track the FTSE/Xinhua China 25 Index, which is made up of the 25 largest and most liquid Chinese stocks. All of the stocks in the index trade on the Hong Kong exchange. Some also trade as American Depositary Receipts (ADRs) on the New York exchange. The fund’s top holdings are China Mobile, 9.7%; China Construction Bank, 9.6%; CNOOC, 8.3%; Industrial & Commercial Bank, 8.0%; China Life, 5.7%; Petrochina, 4.3%; Ping An Insurance, 4.2%; Bank of China, 4.2%; China Petroleum & Chemical, 4.2%; and China Unicom Hong Kong, 4.1%. The fund’s holdings give it the following industry breakdown: Financials, 47.3%; Telecommunications, 17.7%; Oil and Gas, 16.7%; Basic Materials, 10.3%; Industrials, 6.1%; and Consumer Services, 1.8%. The ETF has an expense ratio of 0.72%....

On Friday, January 14, The Successful Investor will unveil a stock that’s primed for explosive growth in 2011. In fact, we think this company’s prospects are so bright we’ve named it The Successful Investor’s #1 stock pick for the coming year. More on how you can get all the details on this exciting #1 pick in a moment, but first we’d like to share with you...

How we made our #1 pick of the best Canadian stocks for 2011

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ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $24.91 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index. This index is made up of gold stocks from Canada and around the world. The weight of any one company is capped at 25% of the index’s market capitalization. The fund’s MER is 0.55%. iShares S&P/TSX Global Gold Index Fund began trading on March 23, 2001. The fund’s top-ten holdings are Barrick Gold at 18.4%; Goldcorp., 12.7%; Newmont Mining, 10.5%; Kinross, 7.5%; AngloGold Ashanti (ADR), 6.5%; Agnico-Eagle, 4.5%; Gold Fields (ADR), 4.4%; Eldorado Gold, 3.5%; Yamana Gold, 3.3%; and Randgold Resources (ADR), 2.6%....

Ottawa’s new tax on income trusts came into effect nine days ago, on January 1, 2011. The new tax puts income trusts on an equal footing with regular corporations. Some income trusts converted to conventional corporations before the new tax came into effect, or plan to do so in the coming months. Others will continue to operate as trusts. (In light of the new tax, we’ve analyzed some trusts that may be appropriate for income-seeking investors in a just-published issue of Canadian Wealth Advisor, our newsletter for conservative investing. One of these trusts has made a number of big investments in wind power. Read on for further details.)...

ISHARES MSCI BRAZIL INDEX FUND $77.55 (New York Exchange symbol EWZ; buy or sell through brokers), is an exchange-traded fund that is designed to track the Brazilian stock market. The fund’s top holdings are Petrobras preferred shares (energy), 10.3%; Cia Vale do Rio Doce (mining) preferred, 9.8%; Itau Unibanco Multiplo SA (banking), 9.2%; Petrobras common, 8.2%; Cia Vale do Rio Doce common, 7.2%; Banco Bradesco preferred (banking), 5.1%; Cia de Bebidas das Americas preferred (beer and other beverages), 3.5%; Itausa-Investimentos Itau (conglomerate), 3.1%; OGX Petroleo e Gas Patricipa (energy), 2.6%; and BM&F Bovespa (Brazilian stock exchange), 2.6%. The ETF’s industry breakdown is as follows: Materials, 25.4%; Financials, 25.0%; Energy, 21.9%; Consumer Staples, 9.1%; Utilities, 5.3%; Consumer Discretionary, 4.8%; Industrials, 3.4%; Telecommunication Services, 2.6%; and Information Technology, 1.7%. The fund has an expense ratio of 0.61%....

ISHARES S&P INDIA NIFTY 50 INDEX FUND $30.91 (Nasdaq symbol INDY; buy or sell through brokers; us.ishares.com), is an ETF that aims to track the S&P CNX Nifty Index, which represents the 50 largest, most liquid Indian securities. The fund’s top holdings are Reliance Industries (conglomerate), 9.8%; Infosys Technologies (software), 9.1%; ICICI Bank, 7.2%; Larsen & Toubro Ltd. (conglomerate), 5.8%; Housing Development Finance, 5.2%; ITC Ltd. (conglomerate), 5.1%; HDFC Bank, 4.7%; State Bank of India, 4.1%; Tata Consultancy Services (information technology), 3.2%; and Bharti Airtel (wireless), 2.4%. The fund’s industry breakdown includes: Banks, 18.9%; Software, 14.2%; Refineries, 10.2%; Engineering, 5.8%; Automobiles, 4.3%; Finance: Housing, 5.2%; Cigarettes, 5.1%; Power, 4.5%; and Steel, 4.5%. The ETF has an expense ratio of 0.89%....

Ruby Tuesday (New York symbol RT) owns 676 restaurants in the U.S. Franchisees run another 140 U.S. outlets, and international franchisees operate 58 restaurants overseas. Ruby Tuesday is one of the stocks we analyze in Stock Pickers Digest, our newsletter for aggressive investing. Ruby Tuesday offers casual American dining. The company’s fall menu contains a number of new offerings, including Fit & Trim entrees, complimentary garlic cheese biscuits, additional side items and an improved Sunday brunch....

ISHARES MSCI EMERGING MARKETS EASTERN EUROPE INDEX FUND $32.44 (New York Exchange symbol ESR; buy or sell through brokers), is an ETF that aims to track the MSCI Emerging Markets Eastern Europe Index. The fund’s geographic breakdown is as follows: Russia, 70.6%; Poland, 18.2%; Hungary, 5.1%; and Czech Republic 4.8%. iShares MSCI Emerging Markets Eastern Europe’s top holdings are Gazprom (Russia: gas utility), 19.5%; Sberbank (Russia: bank), 9.5%; Lukoil (Russia: oil), 8.9%; MMC Norilsk Nickel (Russia: mining), 5.4%; Mobile TeleSystems (Russia: wireless), 3.9%; Rosneft Oil (Russia: oil), 3.5%; Novatek (Russia: natural gas), 3.2%; PKO Bank Polski SA (Poland: bank), 3.0%; Magnit (Russia: retailing), 2.8%; and Surgutneftegas (Russia: oil & gas), 2.8%....

LOBLAW COMPANIES $39.72 (Toronto symbol L; Shares o/s: 278.4 million; Market cap: $11.1 billion; TSINetwork Rating: Above Average; Dividend yield: 2.1%; www.loblaw.ca) is Canada’s largest food retailer. It now has around 1,000 company-owned and franchised stores. George Weston Ltd. owns 62% of Loblaw’s shares. In the three months ended October 9, 2010, Loblaw’s earnings per share rose 11.6%, to $0.77 from $0.69 a year earlier. Restructuring costs lowered its earnings per share by $0.12 in the latest quarter. Overall sales rose 1.3% in the latest quarter, to $9.6 billion from $9.5 billion. The gain was largely due to T&T Supermarket Inc., Canada’s largest Asian food retailer, which Loblaw bought in 2009. Loblaw’s same-store sales fell 0.4%. Lower sales of drugs and general merchandise offset stronger clothing sales. Food sales were flat....

When you practice a “dollar-cost averaging” investing strategy, you invest equal amounts of money (say $300 a month) over a specific period. It’s a little like systematic saving, except you put your money into stocks instead of a bank account. (Dollar-cost averaging is one of many low-risk strategies you’ll learn about in our new free report, Stock Market Investing Strategy: Pat McKeough’s Conservative Investing Guide for Making Money & Cutting Risk. Click here to download yours right away.)

Investing strategy: How dollar-cost averaging can help you profit from long-term market trends

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Members of our Inner Circle service often ask for our advice on stocks they are thinking of buying that we don’t cover in our newsletters. These companies range from the most speculative penny mines to large multinational growth stock picks. For example, an Inner Circle member recently asked for our advice on hotel and casino operator Las Vegas Sands Corp. The growth stock pick’s shares have risen sharply over the past year, and it is opening new resorts in Asia and the U.S. To give you a sense of how my Inner Circle service works, I’d like to share this question, and our answer, with you. I hope you enjoy and profit from it....

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on successful investing, including tax shelters. Each Investor Toolkit update gives you a fundamental piece of investment strategy, and shows you how you can put it into practice right away. Tip of the week: “These 3 powerful strategies will help you make the most of your RRSP tax shelters” Registered Retirement Savings Plans, or RRSPs, are the best-known and most widely used tax shelters in Canada....

When investing in the stock market, as in life, it pays to remember that most things we worry about never happen. It’s in our nature. As humans, we are bred to overreact to, dwell on or even brood over any hint of risk. Today’s common investment-related worries include the possibility of Japanese–style deflation in North America, currency wars, the threat of war on the Korean peninsula and the potential need for more European bailouts.

Why we’re hardwired to overreact to unseen threats

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We’re optimistic about the stock market in 2011. The recent U.S. midterm election results support our view that the Obama administration is likely to tone down its investor-unsettling policies. Moreover, the stock market has stayed reasonably strong, despite reports of new European financial strains. Year-end retail sales seem to be strengthening. All these are good signs. To put yourself in the best position to profit in 2011, it pays to remember these 3 keys to successful investing:

1. Invest for the long term: As a general rule, it’s a mistake to try to read too much into short-term market moves, or the failure of a stock to make a new high. There’s a random element in all short-term stock direction. That’s especially so of junior companies. Many times stocks rise on the expectation of good news, then drop when the good news becomes public. This principal gets summed up in the old-time investor saying about how to trade stocks, “Buy on mystery, sell on history.”
2. Resist the urge to invest based on popular themes or fads: When you indulge in theme investing, you allow a theme or concept to take a central place when deciding what to add to your stock portfolio. Today’s popular investment themes include alternative energy, such as solar wind and geothermal, and “cloud computing” (companies that provide software and data storage that you communicate with via the Internet)....

Our top stock picks seem to attract way more than an average number of takeover bids. We think this is because we zero in on a company’s earnings potential, rather than basing decisions on predictions for next year’s earnings. Corporate buyers and big investors usually see things the same way. Many investors tell us that until they began following our advice, they never had the pleasure of watching a stock they own jump 25% in a few days, due to takeover news. Though we’re used to takeovers, we’ve seen more of our top stock picks attract takeover bids in the past few weeks than at any other time in our history. Here’s a recap:...

Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Tip of the week: “2 risks of following a sector rotation investment strategy” Some investors follow a “sector rotation” approach to investing. That’s when you try to hop from sector to sector, underweighting or overweighting your holdings in certain sectors of the stock market depending on a forecast of the stage of the economic cycle, or other factors....